Possession Formation And Earnings Management Of Listed Chemical And Paints Firms In Nigeria

📄 Project Abstract

Almost two decades after the global financial crises of 90's which was blamed on the pervasiveness of earnings management, the concept still dominates financial literature. Efforts have been made by researchers in finding out the cause and possible solution. Ownership spread and control, otherwise known as Possession Formation have been identified to have an immeasurable role in mitigating management excessiveness and opportunistic behaviour in misrepresentation of underlying economic reality of a firm, but available literature in this area are mixed and inconclusive. Therefore, the study seeks to examine the influence of Possession Formation on Earnings Management of listed Chemical and Paints firms in Nigeria. Possession Formation was proxied by managerial ownership, institutional ownership, Block-holding and Foreign Ownership, while Earnings management was represented by modified Jones (Dechow, Sloan and Sweeney, 1995) model. Using 56 firm-year paneled observations, Fixed and Random...